Very personal finance

A mint man's musings on money show how cash flows sculpt our lives.

By Andrew Leonard

Published October 24, 2002 6:44PM (EDT)

One day, while attending to his various duties as director of corporate communication for the United States Mint, Donald Nichols received a phone call from a woman who wanted to know if her two-headed dime was "real."

Nichols is doubtful: He describes to her, in detail, the high-speed press that strikes dime "blanks" on both sides simultaneously with different images; how the dimes are then automatically pushed into dumpster-sized bins and then flow into a "counting-and-bagging machine." He gently points out the vast unlikelihood that a dime could get stamped with the same image on both sides.

But at the same time as he is explaining the mechanics of coin manufacture, Nichols can't stop thinking about the larger issues raised by his caller's question. Before his stint with the Mint, Nichols achieved a fair amount of success as an author of personal finance books -- at one time, he notes, with knowing immodesty, he "became briefly famous in limited circles as the man to see about zeros" [zero-coupon bonds]. He is comfortable talking, and thinking, about money: what it is, what it isn't, how it grows, how it disappears, how it can be wasted and hoarded and cherished and abused -- how it defines the kinds of lives we lead and relationships we have. But ask him if a unit of currency is "real" and his mind begins to twist. Because he knows too much.

Like a fancy silver dollar or a normal dime, Nichols' approach to money also has two distinct sides. As a U.S. Mint official, he deals with people whose concerns about money focus on currency as a physical object. But Nichols is also a master of portfolio management, crafting retirement plans and maximizing returns on investment; he is the man his brothers and sisters turn to for advice on tax shelters and trusts. In this world he creates value by manipulating numbers. Here, financial instruments like subordinated debentures carry more weight, albeit abstract, than a penny, dime or quarter.

Most people don't take money as seriously as Nichols. When he sees coins he thinks of "Demeter, the divine right of kings, and magic doorways. Whether it's made from gold and silver or copper and zinc, money is only an abstraction, an idea, a necessary notion. Coins are money's gadget, a stage prop for the invisible hand of the market. Machinery makes metal into blanks, art makes blanks into coins, enchanted gates make coins into money, and as money ... the coins ... simply ... vanish."

But seriousness comes naturally to Nichols. He has much to ponder. "Currency of the Heart: A Year of Investing, Death, Work & Coins" is a journal of sorts, a ruminative record of his thoughts and actions during the year of his father's death. More Marcus Aurelius' "Meditations" than your typical diary, "Currency of the Heart" simultaneously explores a set of related themes. The death of Nichols' father accentuates his own lifelong quest for existential meaning; as he attempts to organize his father's portfolio to provide for his mother's remaining years, he sees how thoroughly his role as "money man" shapes all his relationships.

As he mulls over his often troubled relationship with his father, his failed marriage and his uncertain career trajectory, he also roams about in a universe where money is both an abstraction measured by interest rates, yields, load fees and taxes, and a physical reality -- a mixture of alloys that clink in the pocket, a thing collected by irascible, obsessive middle-aged white men.

The result is brilliant -- a book that is poetic in its prose, profound and yet effortlessly readable, a book that is full of humor and sorrow, confusion and loss and pride and joy. Time spent in Donald Nichols' head will simultaneously make you want to call your father, count your pennies, investigate whether you should be putting money in Treasury bonds, and wonder what kind of person, really, you are.

Go to the personal finance section of a bookstore, and you will find a wealth of tomes with titles like "Six Rules on How to Get Rich" or "The Millionaire Next Door." With few exceptions, such as Andrew Tobias' "The Only Investment Guide You'll Ever Need" or "Personal Finance for Dummies," they are either badly written, painfully obvious, or pandering to the get-rich-quick dreams of a nation of chronic wastrels.

"Currency of the Heart" transcends a pathetic genre and delivers a masterpiece. It is a personal finance book with no clear instructions on how to get rich, except, perhaps, the most important: the principle that money should be treated with respect, even awe. For Nichols, control over money leads to self-definition.

"Money also counted," he writes. "Not from stock options and Croesus salaries: money saved from average salaries -- for non-teaching jobs -- began small and grew. Savings I saved to save myself, my portfolio proclaimed liberty within imprisonment more eloquently than poets and was portable property, sir, portable property writ larger than Dickens. It was mine, like my degrees, forever mine and growing, mortgaged to no other will. Money saved by discipline and multiplied through diligence, my money, was an exponent of my wit independent of jobs."

It is no exaggeration to declare that "Currency of the Heart" is the book that puts "personal" into the world of "finance."

Nichols' account of going through his father's records to prepare his taxes as the man lies helpless in a hospital room dying of cancer is both breathtaking and enlightening. It's at once morbid -- his father isn't yet dead, and here the son is, reconstructing his past life by going through files marking bond purchases and mutual fund investments -- and an act of love, a remembrance of things past via quarterly statements.

It is also an occasion for even more pain. It becomes clear to Nichols as he sifts through the records, that the most prudent thing for his father to do, to lessen the tax burden on his surviving wife, would be, essentially, to put all his holdings into a trust for her. But to advise his father to do this would be to acknowledge the man's imminent death. And he can't bring himself to do it.

"Well here I am," he writes, "clear-eyed and focused and seeing exactly what can be done, what should be done, what I would say must be done if I were advising and not involved, and I can't bring myself even to suggest it. I have refrained from the greater part of sadness, solicitousness, sympathy, all my dying father deserves, so I can do what he expects of me. And now, having suppressed the son to succeed as advisor, I fall short as advisor because I am too much the son. How ironic. How totally wrenchingly ironic. I have created the only possible way for my father to receive neither my genuine feelings nor my best advice."

The anguish continues after his father's death. As he organizes his mother's retirement strategy, he comes up with a clever, complicated scheme that would similarly provide for her needs, but would need all her children's consent, and could conceivably be perceived as ghoulish. Again, financial prudence wars with the ambiguities of human emotion.

"I left the computer glowing in my study and went downstairs to the kitchen to reheat my coffee in the microwave. I cursed the position I was in, even though there's no likelihood I'd ever trust someone with Mother's money. I blasted the invention of e-mail, which makes it easy to dash off the wrong message and spread it around. Executors should do this as kings or regents did it, bearing signet-sealed proffers upon silver trays down torch-lit corridors, not popping up on someone's computer screen like a Mario Brother -- an odd opinion, considering the discarnate notion I'm conveying to my siblings: that Mother would be penniless on paper but in fact would receive money through investments which don't physically exist in a trust no one actually owns."

Nichols is hard on himself, perhaps too hard. But that is a cross that would-be philosopher-kings seem destined to bear. A man who has been "a student, soldier, teacher, investment advisor, author, ghost writer, Senate staffer, federal employee -- and multiple times, a Fortune 500 hand," his career, he writes "has been like those moving walkways in airports, even if it led to a résumé like Mount Rushmore." All the while, he wants most to understand himself, which is a challenge, because, as his German teacher tells him one day, "You are a very complicated man."

Complex people who write well make for interesting books. Complex people who write well about money make for exceedingly rare, priceless works of art. Most people who write about money attempt to simplify -- to explain in the easiest possible steps what a Treasury note is, or why credit card debt is bad, Bad, BAD.

But money deserves better. How we handle our dollars and cents adds up to bigger things than just the satisfaction of compounded interest accumulating in a bank account. Money is a medium, not just of exchange, but also of generational relationships and marital negotiations. From the allowances we give our children to the inheritances that are passed on to us, from the pennies saved and retirement accounts bolstered, money is the medium of life. And controlling it is within our power.

"One does something about situations but with things," writes Nichols, "and investments are things. They respond in foretokened ways, rather like puppets upon a string of interest rates, earnings, business cycles, bond covenants, investors' preferences, and companies' good or bad decisions. There's nothing you can do about this. In particular, you can't reverse causes by berating their effects -- may as well hope a rose will rebloom by yelling at it. However, there's lots you can do about a portfolio, because you can change investments within it. By altering investments within a portfolio, you can change proportions of income and growth, increase or decrease exposure to different consequences, alter tax consequences, limit volatility, and situate it to profit from circumstances. Like reseeding a garden, you can plant what blossoms in the economic countryside, even if it's cactus. Provided you're willing to act, that is."

Andrew Leonard

Andrew Leonard is a staff writer at Salon. On Twitter, @koxinga21.

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